COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume CIV, Issue 30752, 17 May 1965, Page 17

COMMERCIAL Review Of Week’s Stock Exchange Transactions

1 racing a pattern of stock exchange trading at present continues to be difficult because as soon as a trend seems to be developing the market reacts to some other influence and the direction its reversed.

Australian stocks at the start of last week seemed to have gained strength again after steadying at the close of the week before, but midy eek they came almost into balance, then declined in the last two days of trading.

On the other hand, New Zealand issues opened last week on a firm but cautious note, went ahead strongly on Tuesday, lost a little momentum on Wednesday, then continued advancing to the close.

This abrupt ebbing and flowing by the market comes after the tidal wave of bonus issues in New Zealand, while in Australia trading is still being buffeted by the winds of international change and upset by internal uncertainty. Active Trading Trading was again very active last week over a w’ide range of stocks, particularly on Tuesday when turn-over on the Christchurch exchange was 27,462 and throughout New Zealand 134 different issues were traded. But the range of issues seems to show that investors are moving first here, then there, without very much certainty. Banks were in good demand last week and gains in this section were made by Bank of New South Wales, ex dividend. Commercial Bank of Australia and National Bank of New Zealand. There was some uncertainty about breweries, with New Zealand Breweries moving up Id on the week to 14s 9d. while Dominion at 17s Sd and Tui at 8s 9d both lost 3d. Frozen Meats Frozen meats were also unsteady. Canterbury Frozen Meat advanced Is to 40s and N.Z. Refrigerating 3d to 17s, but Gear eased fid to 15s 3d, Southland Frozen Meat 3d to 24s and Waitaki Farmers 3d to 17s 6d. National Insurance sold Is 3d up to 25s 9d and South British rose 3d to 30s 9d, but New Zealand Insurance fell 6d to 25s 4d. Woollens and textiles showed no particular trend Lane’s rose 3d to Ils and I.ane Walker recovered Is to 17s 3d, while Alliance slipped 3d to 13s 3d. Although Australian issues were easing at the end of the week this section closed firm with more than twice as many rises as falls. Worthwhile gains in this list were made by A.C.1., Colonial Sugar Australian and New Zealand registers, David Jones, 1.C.1.A.N.Z., Myer. Repco and Woolworths new. Among key Australian stocks to edge back were 8.H.P.. Email, H. C. Sleigh, Waltons, and Mount Isa. Bright Spots Company news gave the market its brightest spots last week and market reaction to some announcements was positive. Northern Roller closed the week 6s higher at 60s, after news of Neill Cropper's merger terms, and this stock could advance further. Neill Cropper shares and notes moved up before the terms were announced, but afterwards slipped back to the closing levels of the week before. Late on Friday A.B. Consolidated, the Christchurchbased biscuit and confectionery manufacturers, announced it had made a take-over bid for M.C.P. by way of a share exchange. Southern Link A southern link for A.B -Consolidated would make it the biggest biscuit manufacturer in the country. A.B. Consolidated was formed in 1961 when the interests of Aulsebrook. of Christchurch, and Bycroft, of Auckland, were merged.

The organisation. with 1 plants in Christchurch and Auckland, is New Zealand manufacturing agent for Kellogs cereals and has a manufacturing agreement with Huntly and Palmer, the British biscuit manufacturers. Another British firm, John: Mackintosh and Sons, holders • of about a third of M.C.P.’s| capital, strongly support the: link with A.B. Consolidated. I If A.B. Consolidated and M.C.P. integrate it will mean one organisation manufacturing several top food lines that were previously imported from Britain. Bank in H.P. Another bank has moved into the finance field—this time the National Bank of New Zealand. On Tuesday came news I that it was taking about 23 per cent of the £435,000 new share capital in General Finance. the largest New’ Zea-land-owned finance company. This is the second bank operating in New Zealand to move into the hire purchase field. Early in April A.N.Z. Bank announced it had purchased from United Dominions Trust, London, a 20 per cent interest in United Dominions Corporation (South Pacific). This organisation is U.T.D.’s wholly-owned New Zealand subsidiary. General Finance’s trading bank link will give it advantages from the bank’s network of branches and add to its standing and stability. This trend to bank hire, purchase interests follows a pattern set in Australia and it is likely to extend within) the limits of New Zealand’s, trading banks. It will be interesting to see) if the state-owned Bank of, New Zealand will also move) into the hire purchase field., N.Z.F.P. Profit New Zealand Forest Pro-) ducts—this country’s largest I public company—has increased its profit by £155,000 or 9.4 per cent to a record of £1.808,000. This profit, still subject to audit, must rank also as the largest profit made by a New Zealand organisation and leaves about £891,742 after paying a steady ordinary dividend of 8 per cent and preference dividend. The latest net profit increase is not as great as the 12.4 per cent or £183,100 rise) of the year before but depreciation has risen sharply, by £282.000 to £l.Bm, and £250,000 more is needed for taxation at £1,480,000. No dividend was paid on the £1,180,439 in ordinary 10s shares issued at a premium of 7s 6d each in December. Excluding the £159.944 required for payment of the preference dividend, earning rate on ordinary capital Of £10.616.917 is slightly down at 15.5 per cent from 15.8 per cent last year. B Underwood Beechey and Underwood last week released its annual accounts confirming a net profit of £13,306 —a rise of £2272 or 20.6 per cent. Training and developmental programmes make up a large proportion of higher overhead costs but some of these will be non-recurring in a year or two. Many New Zealand companies have already placed orders for decimal currency accounting and adding machines and an increase in net profit in 1967 is forecast.

However, the chairman (Mr N. B. Spencer) warns that the profit will not be astronomical, nor will it be perpetuated. A steady dividend of 8 per cent is recommended and takes £6807. This is covered nearly twice by profit. Average earning rate on shareholders’ funds are 7.9 per cent. Shareholders’ funds are £68.149 higher at £195.061. largely by an issue of 45,000 ordinary shares of 20s at a premium of 5s each, made during the year. Set-back For the second successive year, Zealandia Soap. Candle and Trading suffered a setback in profit. A 10 per cent dividend and 24 per cent bonus dividend have again been recommended and will leave £358 from the profit of £4264. Revenue reserves are steady at £21,685 and capital reserves remain the same at £57,314 in the latest year. Shareholders' funds are £358 higher at £110.249 and the net assets an ordinary 5s share rises a Id to 17s 7d. Average earning rate on shareholders’ funds is down to 3.9 per cent from 4.4 per cent. In the last few years there has been a steady decline in the manufacturing and trad-) ing gross profit. From £32,700 in the year to March 31. 1961. it has fallen to £26.292 in the latest year. This has been partly off-.

set by higher income from rent, interest and lower expenses. Economic conditions on the West Coast appear to be improving. In his report to shareholders the chairman of directors of Harley and Company (Mr H. N. Pyne) said there had been a noticeable increase in sales in the latest year although the improvement in trading conditions in Greymouth had not been as rapid as directors would have liked. However, the future trading outlook was improving, with sales rising in recent months. Mr Pyne added, however, that the coal industry appeared to be recovering and farmers were receiving higher prices for their produce. Commenting on the latest year, Mr Pyne said that sales at the Greymouth store improved 10 per cent but higher costs reduced the profit margin. The Nelson store increased its sales by £9OOO and the growth by both stores last year has continued into the current year. If costs can be kept down, then Mr Pyne believes that the company should be returning to a satisfactory net profit on shareholders’ investments “within a short time.’” In its latest year profit rose £463 to £3609 leaving a balance of £443 after paying a dividend of 5 per cent Shareholders’ funds were £443 higher at £85,794 and average earning rate rose to 4.2 per cent from 3.7 per cent.